Regulatory Alerts2022-11-02
Risk Management by AIF Managers Can Be Improved on Several Points
The Dutch Authority for the Financial Markets (AFM) issued this letter following a 2020-2021 inspection of seven alternative investment fund managers to address deficiencies in their risk management practices. The regulator identified critical gaps in maintaining up-to-date risk policies, ensuring strict hierarchical and functional separation between risk management and portfolio management, and properly managing conflicts of interest through compensation structures. The AFM mandates that all managers implement corrective measures, including periodic and comprehensive evaluation of risk systems, to ensure compliance with the AIFM Directive and protect investor interests.
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